Business and Human Rights: Time for Leadership at Home and Abroad

Why isn’t the Australian Government taking a leading role in promoting a rigorous human rights and business agenda? The reasons to do so are too compelling to ignore, argues Phil Lynch

The next Australian Government should commit to local and global leadership in the area of business and human rights.

In his landmark 2008 report, the United Nations Special Representative on Business and Human Rights, Harvard professor John Ruggie, noted that the globalisation of business activity has not been matched by a globalisation of business regulation.

He acknowledged that while corporations have the capacity to harm the human rights of individuals and communities, they can also contribute to poverty alleviation, economic growth and human development. The challenge is to ensure less of the former and more of the latter.

The advancement of the business and human rights agenda presents an international opportunity and a responsibility for Australia (and the rest of the world). On the opportunity side, Australia’s adoption of the special representative’s framework for regulation could become a centrepiece of our UN Security Council candidacy. We could also pursue the agenda through the G20. Australian human rights leadership on this issue would build international credibility and diplomatic capital.

On the responsibility side, many Australian companies, particularly mining companies, can have a severe impact on the human rights of communities throughout the world, including the rights to food, water, health and a clean environment. Despite this, successive governments have not developed a clear framework of human rights obligations for Australian corporations operating transnationally. This is particularly problematic when they operate in jurisdictions with lax or limited regulation or where local governments lack the capacity or will to monitor corporate conduct or enforce standards.

Our work in this area must be globally focused. As a cross-party report tabled in the British Parliament last December stated: ”The impact of business on human rights is a global issue that ultimately requires a global solution.”

The committee recommended that ”the UK play a leadership role in the global debate” on business and human rights. The same rings true for Australia. The committee called on the British Government to support the UN special representative, to ”encourage businesses and civil society to engage with his work” and to work on a ”regional level and globally to agree a consistent approach to business and human rights”, including through the development of an international agreement.

Consistent with these recommendations, Australia should adopt the special representative’s framework as a basis for our corporate human rights policy. We should engage with the work of the special representative, including by inviting him to undertake a mission to Australia to meet with government, business, NGOs and other key stakeholders.

In addition to pursuing a progressive agenda at the international level, we must also attend to unfinished business, such as ratifying the UN convention on the rights of migrant workers. Australian bilateral trade and investment agreements should also contain clauses to promote and protect human rights.

Australia must also do more on business and human rights at home. The range of policy measures should include both hard and soft power options, in line with the British committee view that governments should not give ”undue priority to voluntary initiatives”.

First, government should use public procurement to reinforce the responsibility of business to respect human rights. As the British committee said, ”government has immense power as a purchaser and should take responsibility for human rights impacts in its supply chain”.

Second, governments and public authorities should conduct or require human rights impact assessments, particularly on large projects. The British committee recommended that this responsibility also apply to the private sector, including by amending the Companies Act to require that companies undertake an annual human rights impact assessment.

In Australia, there may also be need to amend the Corporations Act to require (or at least explicitly permit) directors to consider human rights issues as an aspect of their duty to act in the best interests of the company.

Third, governments and public authorities should promote ethical investment, including through their own investment approach and by supporting socially responsible market indices and certification programs.

Fourth, Australia should develop national guidelines for business on how to act compatibly with human rights. The British committee found that business lacks clear guidance on human rights issues and recommended that government work closely with stakeholders, including national human rights institutions, to develop such guidelines

Fifth, Australia should improve access to complaints mechanisms for victims of corporate human rights violations. This includes promoting the development of company level grievance procedures and strengthening existing external mechanisms, such as the national contact point under the OECD’s guidelines for multinational enterprises.

Successive Australian governments have made much of their commitment to international human rights, multilateral engagement, strong economic institutions and business and human development. This is to be congratulated. The robust advancement of the business and human rights agenda at the international level and through domestic measures presents an opportunity to blend these strengths and commitments for good.